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VANDERVELDE v. PUT & CALL BROKERS & DEALERS ASSN.

June 6, 1972

Lee Vandervelde, & Co., Inc., and L. Vandervelde New York Corp., Plaintiffs,
v.
Put And Call Brokers And Dealers Assn., Inc., et al., Defendants


Pollack, D. J.


The opinion of the court was delivered by: POLLACK

MEMORANDUM

POLLACK, D. J.

 In this antitrust case plaintiffs have applied pursuant to the decision in favor of the plaintiffs made April 14, 1972 for allowance to plaintiffs of a "reasonable attorney's fee", 15 U.S.C. ยง 15, to be added to the judgment.

 This action was commenced in November, 1963 and involved 12 trial days in the fall of 1971 and an additional day in January, 1972 to hear further proof on damages. The judgment held 17 of the 41 named defendants liable for violation of Section 1 of the Sherman Act by reason of the enforcement of a price-fixing rule. The claims against the remaining defendants were either dismissed on the merits or voluntarily discontinued.

 The damages sustained were found to be $20,870 for the corporate plaintiffs, representing the value of goodwill and lost profits and $16,000 for Lee Vandervelde, representing lost salary. These damages were trebled as to the defendants other than the defendant Estates, which were held liable only for single damages. Judgment was entered accordingly on May 5, 1972. The amount of the trebled damages is $110,610.

 Plaintiffs' retainer agreement with their attorneys identified three forms of compensation. It provided for payment of time charges at the rate of $40 per hour for lead counsel, $20 per hour for the time of one associate and $15 per hour for the time of the other associate, up to a maximum of $27,500. These hourly rates were below counsel's normal charge. In addition, plaintiffs agreed to pay counsel 27 1/2% of any recovery obtained by settlement or judgment. They further agreed that any judicial award of fees which exceeded the sum of time charges actually billed should belong to counsel as part of their fee. The plaintiffs have heretofore paid their counsel the maximum of the agreed time charges and $5,000 additional in fees to predecessor counsel.

 The application is not for any specific sum to be fixed by the Court as an allowance. Counsel's affidavit mentions that the case consumed 5161 1/2 hours of their time and that their normal time charges for the services rendered would be billable at the sum of $265,367.50. They argue that an award of antitrust attorneys' fees should significantly reflect the cost of the lawyers' time occupied with the litigation, as a necessary adjunct to the Congressional policy of encouraging the private treble damage action.

 The defendants resist any award based on the expenditure of time and effort on their contention that many baseless claims and theories were advanced during the lengthy course of the action which consumed enormous expenditure of time and effort unnecessarily for both sides. Defendants contend that the maximum award to plaintiffs of attorneys' fees which would be reasonable in this case is $27,500.

 Self-evidently, the plaintiffs seek an allowance of counsel fees which would exceed both the single and the trebled damage awards. To accomplish this, plaintiffs suggest the need and propriety of a new approach on the whole question of remuneration of counsel in antitrust cases. They suggest that private enforcement of the antitrust laws should be encouraged by an award based on what an attorney would charge for his time, to stimulate the acceptance of unpopular causes by the Bar and reduce the burden of government in such causes.

 Plaintiffs contend that the antitrust bar is most reluctant to cooperate with victims in the institution of independent antitrust prosecutions because of the time consumed in such cases and the energy and cost involved in bringing the cause through pretrial and trial against the giants of finance, trade and industry. They say that the policy of the Clayton Act will be thwarted if there is a peril that antitrust counsel could emerge with a fee reflecting only a small part of the time and energy devoted to the cause. They say that vindication of the policy of the Act requires that the attorneys' fees not be geared merely to the amount of recovery but to the public objectives achieved from the skill and effort of counsel.

 In short, the plaintiffs would cast the problem before the Court in terms of rewarding the institution of this type of lawsuit for its social and economic effects rather than for its direct benefits, to assure that legal talent of quality will enter such contests.

 The defendants take a decidedly different approach. They say that the traditional bases are the significant considerations in fixing the fee, e. g., the representation and results achieved considering the complexity of the issues and the skill and efficacy of counsel's representation.

 The purpose of the statutory grant of attorneys' fees is to insulate a treble damage recovery from expenditure for legal fees. Farmington Dowel Products Co. v. Forster Mfg. Co., 421 F.2d 61, 86-87, n. 57 (1st Cir. 1970). The fee authorized by the statute is one allowed to the plaintiff, not to his attorneys, and the statute requires that the Court set a "reasonable" fee. Assessment of what constitutes a "just and fair compensation for the services rendered" by plaintiff's counsel, Darden v. Besser, 257 F.2d 285, 286 (6th Cir. 1958), ultimately depends upon the circumstances of the individual litigation in which the award is sought.

 While a number of factors have been identified as relevant to the determination of a reasonable fee, see Hanover Shoe, Inc. v. United Shoe Machinery Corp., 245 F. Supp. 258, 302-03 (M.D. Pa. 1965), vacated on other grounds, 377 F.2d 776, 793 (3d Cir. 1967), rev'd in part on other grounds, 392 U.S. 481, 88 S. Ct. 2224, 20 L. Ed. 2d 1231 (1968), the amount fixed should bear a reasonable relationship to the services required and rendered in a particular action and the result achieved by counsel's efforts therein. As Judge Metzner commented in his recent opinion in Trans World ...


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